What to do with outstanding holiday at the end of the holiday year?
Often employers find that at the end of the holiday year, some employees have a proportion of holiday entitlement which has not been taken. This means there can be a rush on holiday requests at the end of the holiday year, leaving employers short of staff or unable to fulfil the request. As an alternative, can employees be paid this entitlement? Not according to the working time regulations which specifically state that an employee should not be paid in lieu of taking their minimum holiday entitlement of 5.6 weeks (28 days for an employee working 5 days per week).
Holiday entitlement is there to allow for employees to take time away from work and paying in lieu defeats this object.
There is one exception and this is that accrued holiday entitlement may be paid upon on the termination of employment. Otherwise, employees must be allowed to take their full holiday entitlement during the annual leave year. This means that employers are expected to put in place mechanisms to ensure that their employees take regular holidays throughout the leave year to avoid any claim from an employee that they were prevented from taking their full holiday entitlement.